Introduction
When life throws curveballs like job loss, illness, or separation, mortgage repayments can become overwhelming. In such moments, borrowers expect banks to provide timely and fair hardship support. But a recent ASIC review has exposed serious flaws in how some major lenders handle these cases.
For homeowners in Sydney, Melbourne, Brisbane, Perth, Adelaide, Hobart, Canberra, and Darwin, this raises important questions: are banks really doing enough to support struggling Australians? And how can working with a mortgage broker make a difference?
What ASIC’s Review Found
ASIC’s investigation uncovered widespread issues:
- Delays in processing hardship requests — some borrowers waited weeks or months for responses.
- Inconsistent communication — customers often left in the dark.
- Poor documentation — leading to confusion and errors.
- Failure to meet obligations under the National Credit Code.
These findings paint a concerning picture: when Australians need their banks the most, support often falls short.
Why Hardship Support Matters
Mortgage hardship support isn’t about avoiding repayment forever — it’s about giving borrowers breathing space during tough times. Typical hardship arrangements may include:
- Temporarily reducing repayments
- Switching to interest-only for a period
- Extending loan terms to lower monthly costs
- Pausing repayments in extreme circumstances
Without timely support, borrowers risk falling into arrears, damaging their credit, or even losing their homes.
The Market Context: Rates Are Falling, But Stress Remains
- BOQ’s 4.89% two-year fixed rate and NAB/ANZ’s 5.19% offers have created opportunities to refinance and save.
- Yet, despite these sub-5% deals, many Australians remain under pressure from cost-of-living increases, higher rents, and stagnant wages.
- For separated households or single-income families, the stakes are even higher.
This is why effective hardship support is critical — and why ASIC is right to call lenders out.
Capital City Impacts
- Sydney: With the highest mortgage balances, delays in hardship responses hit hardest.
- Melbourne: Competition among lenders creates refinancing opportunities, but hardship failures still harm vulnerable borrowers.
- Brisbane: First home buyers with small deposits are particularly at risk.
- Perth: Growing values may help some refinance, but hardship support is vital for those on variable loans.
- Adelaide: Smaller loan sizes mean support can prevent financial spirals.
- Hobart: Borrowers on fixed incomes struggle when banks delay relief.
- Canberra: Public sector workers still face hardship during separation or illness.
- Darwin: Regional borrowers often have fewer lender options, so lack of support is more severe.
Real Client Story: Ben in Hobart
“After losing my job, I reached out to my bank for hardship support. Weeks went by with no update. My broker stepped in, escalated the issue, and even found me a lender willing to refinance at a lower rate. That intervention saved my home.”
How Mortgage Brokers Support Clients in Hardship
- Advocacy Brokers liaise with banks directly to speed up responses.
- Alternatives If hardship support is inadequate, brokers can compare refinancing options across 50+ lenders.
- Tailored Strategy Structuring loans with features like offset accounts, redraw, or fixed repayments to reduce risk.
- Compliance Brokers are bound by a legal duty to act in your best interests, unlike banks driven by shareholder profits.
Why This Matters in 2026
With the RBA tipped to deliver more rate cuts, borrowers should have greater relief in the year ahead. But if banks fail to pass these benefits on, or delay hardship assistance, Australians risk missing out on the stability they deserve.
This is why proactive reviews and broker advocacy are so important.
Practical Steps for Borrowers
- Don’t wait — if you’re struggling, contact your lender or broker immediately.
- Keep records — log every interaction with your bank.
- Explore refinancing — even during hardship, brokers can find lenders willing to help.
- Know your rights — under the National Credit Code, you are entitled to fair hardship consideration.
📅 Book Your Free, No-Obligation Chat
At Money Tree Mortgage Brokers, we stand by clients through good times and tough times. Whether you need hardship support, a refinancing strategy, or guidance on managing repayments, we’ll compare 50+ lenders and fight for the best outcome.
You don’t have to face hardship alone.
